New Money, No New Narratives

Any views expressed in the below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.

Gm all. Another wild whacky week in the world of NFTs. Gas has somewhat normalized for the most part and I think it’s safe to say that shitcoin season has officially ended. Hopefully you did not gamble away your Pepe winnings to buy the top of an influencer grift and instead can spend this on valuable pictures on the blockchain. For the most part, prices week-over-week have been fine, with lackluster price action. One of the troubling factors is clearly lack of new entrants, but at this point we’re all aware that it’s the same 14 of us dumping on each other. Recently, I’ve been thinking more and more about catalysts and it doesn’t seem like we have many. Outside of Pudgy Penguin toys, $Meme, and Elon musk tweeting a milady, I’m not sure what’s coming next. The lack of excitement from Yuga’s announcement on HV-MTLs is also something that the market isn’t quite used too.

If we take a look at the 1 year volume, we are getting eerily close to what I referred to as the “sentiment bottom” back in November 2022. This was when there was practically zero volume, coupled with what seemed to be a bottom in terms of broader interest in NFTs. I don’t think we get there again, but it sure isn’t all sunshine and rainbows and we did get close in the last few weeks.

On the other hand, maybe summer is starting early and we’re all ready to leave our laptops inside for the foreseeable future. What do I know. The below tweet from punk9059 is quite something though.

What intrigues me here is that despite the low volume, prices went up. This is VERY different from what we saw in the extremely low volume periods of October and November 2022. A few theories here:

1. Many gave up and decided to hold their bags until “next cycle”

2. Bags are down so bad it’s not “worth” selling

3. People are comfortable riding the ups/downs after holding an NFT for 1 year+ at this point

4. Conviction or something good is around the corner (otherwise known as hopium)

In sum, I think a lot of the current market participants are quite numb to the drawdowns. At this point, we’ve also become aware of farmer tactics and have seen the constant pumps and dumps from specific collections. Maybe we got tricked at first, but not anymore.

It has definitely been a little boring – not going to lie. I’ve still been farming Blur since I think it’s +EV but there’s little to focus on. Even some of the most active discords I’m in these days aren’t all too active outside of their shitcoin chats. Notably adding to this is the lack of new mints. Outside of Milady Columbia, there has been practically nothing since Nakamigos (remember when this was a future blue chip). Until new mints and new projects can bring back the hot ball of money to the table, I don’t foresee much on the near-term horizon.

All of this being said, let’s still not forget that a lot of degenerate gamblers got very rich over the last few weeks. NFTs are extremely narrative-driven, with 1 or 2 projects owning a given narrative. During shitcoin season, we saw Remilios prove that culture > utility. These along with Miladys continue to show strength and I actually think they’ll begin to fill the void of Doodles/Moonbirds/Clone X. Anyways, back to narratives.

In the bear market, every 2-3 weeks you get some sort of Nakamigos situation. A collection pumps 50x, 3 guys on twitter post their .5 ETH to 50 ETH gain, and everyone apes in and buys the top. While I’m quite bullish on the Miladys/Remilio ecosystem, we saw Miladys pump to 8 ETH on an Elon tweet and cut in half since. These “narratives” have defined the entire bear market and if you’ve gotten good at rotating between them then you haven’t been complaining about your bags. Paper hands, diamond wrist as the great Cirrus says.

While I have surely screamed into the void about Pudgy Penguins (since the pico bottom of course) I think these are next. Yes I am talking about my bags, so for the 17 of you left here please do not make a decision based off of what I say (never financial advice, never art advice, never advice). That being said, $MEME from Captainz still feels like it’s a few weeks away, and with the release of Pudgy toys this Thursday, it’s hard to not see a narrative taking shape.

I don’t really see a world where Pudgy Penguin toys are on the front page of Amazon and we don’t get some sort of pump. But that’s just me. Adding to this, it seems they’re building some sort of Webkinz and Club Penguin hybrid, where each toy comes with a soulbound penguin and tradable traits. Strength from the Penguins over the last week has shown that many market participants feel the way I do. Anyways, we’ll see if the narrative takes hold because as we all know right now there is practically nothing. The Blend pump for MAYC/BAYC was a pump for ants and DeGods/Azuki have basically retraced 90% of their original Blend pumps.

Overall, I’m looking forward to purchasing my penguin stuffed animals almost as much as I am for my season 2 airdrop which feels like it’s been a decade. Enjoy the week and do your best to not have a farmer dump on your head.

Cheers,
Wilson